PARTNER CONTENT: The 5G era is starting to take shape in Latin America. While 5G coverage in the region is still mostly limited to major cities, there is growing evidence that deployments are ramping up. GSMA Intelligence will soon publish an in-depth report on the region’s 5G development, including analysis of eight major Latin America countries. In this exclusive interview, author Pau Castells gives a sneak peak into the report’s highlights.
Mobile World Live (MWL): Pau, how would you sum up 5G progress so far in Latin America?
Pau Castells (PC): Although in the early stages of rollout in many countries, the region is certainly making strong progress. As of March 2023, eight countries in Latin America had launched commercial 5G services. The number of 5G connections will grow steadily in the next couple of years, before ramping up in the second half of the decade as new 5G markets go live and existing networks expand to cover new areas.
The speed of adoption reflects the high levels of consumer interest in 5G as well as positive sentiment towards 5G among enterprises. These are both things we are seeing from recent GSMA Intelligence surveys in the region.
MWL: Encouraging stuff. And how heavily are operators investing in new 5G networks – and where are they investing?
PC: The rollout of 5G networks will clearly involve large investment efforts. Across the region this is expected to drive a slight increase in capex levels.
Key focus areas will include investments in massive MIMO capabilities, cell site densification and fibre backhaul. Investments in sustainable technologies, cloud and IT transformation projects in the core network, and security enhancements are also high on the agenda.
Moving to cloud-native infrastructure will be crucial to enable 5G standalone (5G SA) deployments. As is the case globally, most initial 5G deployments in Latin America use a non-standalone architecture. 5G networks in Brazil are a notable exception. However, over time 5G SA will increase in other parts of the region.
MWL: Let’s talk services. Are there any particular 5G services that have proven popular so far?
PC: According to our survey, 5G home broadband is an extremely or very appealing proposition for two in three Latin American consumers. 5G Fixed Wireless Access (FWA) will mainly be used to facilitate first-time home broadband adoption in the region, in addition to improving speeds for households reliant on cable/ DSL connections with lower performance. Moreover, there is likely to be a specific focus on the urban, middle-income segment. 5G also provides operators with new bundling opportunities, with 5G consumers showing higher levels of interest in adding services and content to their contracts. Digital entertainment and remote health applications are among the services offered to consumers with 5G service plans in Latin America.
MWL: Are there any services and applications you believe hold great potential in the future as revenue generators for operators?
PC: At GSMA Intelligence we believe the enterprise sector will be pivotal to the success of 5G. In fact there is a consensus among operators that B2B is the largest incremental revenue opportunity in the 5G era considering the raft of digital transformation projects in a number of industries. Operators around the world typically see manufacturing as the largest B2B revenue opportunity going forward.
5G provides benefits for IoT deployments as well as low-latency applications. There is also scope to scale private wireless solutions. Latin America has seen demand for private wireless networks, particularly in Brazil, Peru and Chile. Most deployments so far have been private LTE solutions, but 5G use cases are growing. These include autonomous guided vehicles (AGVs) for transporting goods, drones for site survey and high-definition video streaming for safety and security applications.
MWL: What needs to happen to ensure Latin America makes the most of the 5G opportunity?
PC: 5G brings with it the opportunity to transform societies. But for this potential to become a reality we’ll need to see the right level of investments coming through at a sufficient pace. In this context, the importance of an appropriate regulatory environment can’t be overstated. It is fundamental that policymakers provide timely access to the right amount of spectrum for 5G, under the right conditions.
Upcoming 5G spectrum assignments therefore represent both opportunities and risks for regulators, and will largely determine the success of digital transformation strategies in each country in the region.
Beyond spectrum management, regulatory decisions will be key to accelerating 5G development. To this end, government-led digital transformation strategies have proven important in other parts of the world in order to place 5G development at the centre of the policy debate. This is a model that policymakers in the region might consider. Even more importantly, what is needed is regulation that creates an environment for continued mobile sector investment and innovation. In most countries in the region, this should include a simplification of planning procedures and regulations for site acquisition, colocation and upgrades of base stations, as well as a rebalance of additional sector-specific taxes and regulatory fees that consumers and operators of mobile services often face.
MWL: Finally Pau, did anything surprise you in the process of writing this report on 5G in Latin America?
PC: A couple of things stood out. Firstly, the confirmation that the productivity and efficiency gains from 5G can drive significant economic growth in the region, in just a few years. By 2030, these effects will reach more than $60 billion, representing 0.9% of total GDP in the region.
Further benefits expected from 5G when compared to previous mobile technologies include improved access to healthcare and education, advanced manufacturing, increased public security and response times, safer driving conditions, and reduced pollution.
And then there’s the issue of how the industry can leverage 5G to respond to new challenges such as ensuring a sustainable future. Alongside the transition to renewables, operators are also switching to more efficient network technologies to reduce energy costs. AI-driven network management applications will be central to this.
To read the report please download it here.